Mortgage broker denies hiding fees

      DEAR BOB: As a mortgage broker, I especially enjoyed your caustic remarks a few weeks ago about the take-it-or-leave-it last minute "garbage fees" some mortgage lenders extract from unsuspecting home loan borrowers.
      At the time I give the loan applicant the written good faith estimate of loan costs, I usually am not certain which lender will ultimately make the loan. If the lender with the best terms rejects the application, then I shop it among dozens of other lenders. It is these lenders, usually not the mortgage brokers, who impose those crazy "garbage fees." Our firm charges, in addition to customary loan fee points (one point equals one percent of the amount borrowed) a processing fee of $250. But we disclose it up front.
      Although lenders in our area don't impose that "escrow waiver fee" you mentioned, I have met mortgage brokers from other areas where that fee is quite normal. Why don't you expose the lenders, not the mortgage brokers, for their outrageous garbage fees? -- Richard L.
      DEAR RICHARD: Thank you for sharing your insights. Mortgage brokers are middlemen between the borrower and the lender. You can't possibly know the specific garbage fees each lender will try to extract from its borrowers.
      But borrowers should be told as soon as possible about all lender charges. Instead, many lenders wait until the last minute to present their garbage fees, which are 100 percent lender profit. By that time the borrower, especially a home buyer, has no place else to borrow. And lenders know this. They realize the borrower probably won't lose the home purchase and refuse to pay the garbage fees.
      Lenders should only charge a loan fee for their origination services and not attempt to increase their profits with unnecessary fees for underwriting, processing, documentation, warehousing and escrow waiver. Recently I was talking with a mortgage broker who does business with many lenders. He says lenders tend to charge fewer garbage fees on refinancing than for home purchases, because, he thought, homeowners who are refinancing usually aren't under pressure like home buyers and will reject a loan with too many unexpected fees.
      -- Send your questions to Robert J. Bruss, Tribune Media Services, 435 N. Michigan Ave., Suite 1400, Chicago, Ill. 60611.